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Monday, September 24, 2012


At the cost of being branded as an alarmist or a mad-person with phobias or even as a lackey of some vested interests, I wish to predict the scenario 10 Years from now, with FDI in Retail Sector, based on the Historical Data.
According to the ‘World Bank- Global Development Finance Report 2009’[1] Educational Qualifications of Organised Retail Sector are – mostly computer savvy – 56% of Undergraduates, 36% of Graduates & 8% of Post-Graduates.

If Walmart succeeds the way it did in Mexico – capturing as much as 62%, in the first 15 Years (since 1997) [2] – assuming our Retail market stagnates at the current level of only Rs. 21,34,400/- Crores of Sales with 12 Lakh businesses – owned by individuals of Families that employ as many as 4 Crores of mostly Computer-illiterate, School Drop-outs – It would displace, like it did in Mexico – around 7 Lakh businesses and would employ just over 13 Lakh Undergraduates, Graduates & Post Graduates, with a Sales of around Rs. 13,23,328/- Crores – after disemploying as many as 3,86,76,672.

       01)  Who says FDI in Retail Sector, with the likes of unscrupulous Walmart [3] entering Indian Retail Sector would create jobs and not take away them?

Much larger studies concluded that the Prices of Supermarkets in Latin America, Africa & Asia have remained higher, by 20%-30%, than those of the open Markets.

         02)  Why anybody should peddle canards of ‘the Prices at Large-Format Retail Outlets’ would be Cheaper to the Consumer?? 
In USA, the birth-place of “Walmart” and several other Large-Format Retail Outlets, their Government has been subsidizing its Farmers to the tune of US$ 60/- Billions a Year!

             03)  What is the logic or motivation [4] behind spreading rumours about Farmers Getting better prices???

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  1. Instead of improving and setting up existing infrastructure and providing a better platform for those who are already doing businesses in India (read Indian citizens) this government's only resort to reduce the difference between Exports & Imports and therefore the foreign currency demands is FDI. They don't think that by not standing up to their rights in UN summit against China and its increasing intervention in Indian markets which is almost killing everything in its domestic consumption they can curb this. They don't see that solar panels imported from china have made few companies here who wanted to establish their solar power plants to shut down. Not only China's but many other countries' imports can be reduced by improving our existing system. If we do not buy articles shipped from abroad, then they may turn out costly but we won't require additional foreign currency for trade.

    There are numerous examples on how without the FDI as well we can survive and we can emerge better.

  2. Accordingly to Reuters, we appear to have healthy balance of payment situation:

    We need not hurry FDI without conducting an comprehensive analysis of FDI & its adverse impacts elsewhere, especially in case of Retails Sector, given the notorious case-studies, we hear from Mexico, Thailand, etc..